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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has fought back from earlier declines and is on course to record a small gain. At the time of writing, the benchmark index is up 0.1% to 7,340.3 points.

Four ASX shares have failed to follow the market higher today are listed below. Here’s why they are charging higher:

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price is down 6.5% to $1.99. This appears to have been driven by profit taking after some very strong gains in recent weeks. For example, even after this decline, the BrainChip share price is up 150% in 2022. Investors may also be questioning whether a company with such little revenue warrants a valuation of over $3.5 billion.

Graincorp Ltd (ASX: GNC)

The Graincorp share price is down 2% to $7.67. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has downgraded the grain exporter’s shares to a neutral rating with an $8.00 price target. UBS made the move on valuation grounds following a strong gain in recent months.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has continued its slide and is down a further 4.5% to a 52-week low of $2.10. Investors have been selling the ecommerce company’s shares this week following the release of a disappointing half year trading update. That update revealed weaker sales and a collapse in its profitability due to increased competition.

Zip Co Limited (ASX: Z1P)

The Zip share price is down 1% to $3.62. This is despite the buy now pay later provider reporting strong growth during the second quarter. Zip posted a 53% increase in transaction volume to a record of $2.6 billion and a 58% lift in quarterly revenue to a record of $167.4 million. A key driver of this growth was a 57% increase in customer numbers to 9.9 million. It appears as though some investors were expecting even stronger growth.

The post Why BrainChip, GrainCorp, Redbubble, and Zip shares are dropping today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Zip’s Q2 update, Santos and Woodside deliver record revenue
• Has the Zip (ASX:Z1P) share price fallen on Block’s ASX debut?
• Why did the BrainChip (ASX:BRN) share price have such a stellar year in 2021?
• Zip (ASX:Z1P) share price on watch amid record second quarter performance
• Redbubble (ASX:RBL) share price sinks again after brokers respond to update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is having another tough day so far this Thursday. It has been seesawing all day but at the time of writing is edging higher by 0.05% at 7,336 points.

But rather than dwelling on that, let’s instead take a look at the ASX 200 shares that are currently topping the market’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume today

Evolution Mining Ltd (ASX: EVN)

ASX 200 gold miner Evolution is the first cab off the rank today. This Thursday has seen a hefty 10.73 million Evolution shares bought and sold. This appears to be a result of the big move Evolution has made on the markets thus far. The miner is currently up a very healthy 8.92% to $4.15 a share.

With other ASX 200 gold miners like Newcrest Mining Ltd (ASX: NCM) enjoying similar bounces today, we can probably thank the rise in the gold price that we have seen over the past day or two as a catalyst here. And, in turn, it’s likely today’s elevated trading volume is the result of this steep share price appreciation.

Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals is next up today. This ASX 200 lithium share has seen a notable 12.09 million shares change hands so far on Thursday. There isn’t much in the way of news or announcements out of Pilbara today (or indeed in 2022 thus far), so again we can probably place the root cause of this volume down to the movements of the Pilbara share price itself. This company is currently enjoying a 2.43% bump to its valuation and is trading at $3.80 a share.

Telstra Corporation Ltd (ASX: TLS)

From PLS to TLS! ASX 200 telco Telstra is the final and most traded ASX 200 share of the day so far. This Thursday has seen a whopping 19.17 million Telstra shares swap owners at the time of writing.

Unfortunately for investors, it looks as though a steep sell-off on Telstra is what is behind this elevated trading volume. The telco is currently down a nasty 1.55% at $4.13 a share. That’s getting to some distance from the company’s new 52-week high of $4.31 that we saw hit just this week.

The post Here are the 3 most heavily traded ASX 200 shares this Thursday appeared first on The Motley Fool Australia.

More reading

• Why is the Evolution Mining (ASX:EVN) share price surging 10% today?
• ASX 200 (ASX:XJO) midday update: Zip’s Q2 update, Santos and Woodside deliver record revenue
• 5 best shares to bet on electric cars right now
• 2 killer ASX shares to buy for a volatile 2022
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen owns Newcrest Mining Limited and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Analysts at investment bank Morgan Stanley upgraded its valuation on the stock to $28.50 in a note yesterday
• Morgan Stanley is bullish on the ASX banking sector in 2022
• The firm reckons that shifting interest rates will positively impact margins
• In the last 12 months, the NAB share price has climbed 20% into the green

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Shares in banking giant National Australia Bank Ltd. (ASX: NAB) are tracking lower today and now trade less than 2% in the red at $28.60.

As seen in the chart below, the NAB share price has outperformed its benchmark over the past 12 months, however has turned sharply this week.

There’s been nothing remarkable out of the big 4 member’s camp this week to pinpoint the downside pressure. However, analysts at investment bank Morgan Stanley upgraded its valuation on the stock to $28.50 in a note yesterday.

In the research update, Morgan Stanley analyst Richard Wiles noted that ASX banking shares could outperform their benchmarks in 2022 amid the prospect of higher interest rates set to improve key margins for lenders.

Why the upgrade to the NAB share price target?

Analysts at the firm note that sooner-than and larger-than-expected rate hikes from the Reserve Bank of Australia (RBA) are a net positive for ASX banking shares in general.

This, combined with a higher fixed-rate mortgage pricing regime looks set to improve the sector’s margin outlook, the broker says, which will bode in well for shares in majors such as NAB.

The outlook isn’t without its inherent risks, however. Whilst the broker is optimistic on the runway for players such as NAB in 2022, it also cautions the impact of higher rates on the housing market and on credit quality.

Even still, the broker thinks the banks will benefit from these and other industry-specific tailwinds, leading to higher year on year growth schedules.

“We think mortgage growth expectations are reasonable” it said in the note, “and the major banks’ total loan growth should be higher in FY 2022 than in FY 2021”.

The broker raised its valuation on the NAB share price by around 3% today, however retained its ‘equal weight/attractive’ rating in doing so.

Meanwhile, fellow broker Macquarie reckons NAB is a buy right now and assigned a $30.50 price target to its shares in a note from last year.

Goldman Sachs, Jefferies, JP Morgan and Jarden are also bullish on NAB’s share price. Each broker labels the bank as a buy, and have valuations above the $31 mark.

In fact, checking a list of analysts provided by Bloomberg Intelligence, 10 firms have NAB as a buy whereas 6 have it as a hold. The consensus price target for 2022 is $30.31, indicating a 6% upside potential at the time of writing.

NAB share price summary

In the last 12 months, the NAB share price has climbed 20% into the green. However, since starting the new year, shares have crept down and are now less than 1% in the red.

This comes after a month of trending down where shares are approximately 1% in the red, and down a further 2% in the past 5 weeks of trading.

The post NAB (ASX:NAB) share price target raised at Morgan Stanley. So, is it a buy? appeared first on The Motley Fool Australia.

More reading

• Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends?
• Is the NAB (ASX:NAB) share price an ASX buy or sell for 2022?
• Brokers name 2 ASX 200 dividend shares to buy
• Is Westpac (ASX:WBC) going to be the best big 4 bank for dividends in 2022?
• NAB (ASX:NAB) share price gains following digital health claim acquisition

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• The Monash IVF share price has lifted nearly 6% today
• It comes after COVID-19 IVF restrictions were lifted in Victoria
• The company will resume IVF services next week

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The Monash IVF Group Ltd (ASX: MVF) share price is rising today amid the lifting of a COVID-19-related suspension on IVF treatments.

The fertility services company’s shares are trading at $1.052 in afternoon trade, up 5.73%.

Let’s take a look at what may be impacting the company today.

Victoria IVF ban lifted

Investors appear to be reacting positively to news the company will be able to recommence fertility services. The Victorian State Government lifted a temporary ban on IVF procedures today.

The order had originally slated IVF procedures to remain suspended until 12 April due to COVID-19 restrictions on non-urgent surgeries.

Today, however, the government reversed this decision which will enable IVF procedures to recommence. Monash IVF says it will recommence its IVF services by 26 January.

An online petition calling for a reversal of the suspension of fertility treatments across Victoria gained 140.000 signatures, 7News reported.

In a statement released to the ASX, Monash IVF stated:

Monash IVF is pleased IVF procedures will recommence and the company is focussed on informing patients of their options to recommence their treatment and ensure sufficient workforce and resources are in place to meet demand.

The company also remains focussed on maintaining appropriate measures and protocols in place to protect the health and safety of the company’s patients, employees and specialists.

Monash IVF shares have seen consistent gains in the past year. In November, the company released its financial results for FY 2021, which showed adjusted net profit after tax soared 61.5% compared to the previous financial year.

Monash IVF share price snapshot

The Monash IVF share price has soared around 42% in the past year but is flat this year to date.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned about 8% in the past 12 months.

Monash IVF has a market capitalisation of about $409 million based on its current share price.

The post The Monash IVF (ASX:MVF) share price is gaining 6% today. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why Allkem, Beacon Lighting, Northern Star, and Virtus Health shares are charging higher
• Newcrest (ASX:NCM) share price regains some shine as inflation worries mount
• Top broker tips Allkem (ASX:AKE) share price to shoot 20% higher
• What kinds of dividends will APA Group (ASX:APA) payout in 2022?
• Fans of Treasury Wine (ASX:TWE) shares might be surprised to learn of its NFTs

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small gain. At the time of writing, the benchmark index is up slightly to 7,339.1 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Allkem Ltd (ASX: AKE)

The Allkem share price is up almost 3% to $11.10. This appears to have been driven by a broker note out of Morgans. According to the note, the broker has upgraded the company’s shares to an add rating and lifted its price target on them to $13.25. Based on the current Allkem share price, this implies potential upside of 20% for the lithium miner over the next 12 months.

Beacon Lighting Group Ltd (ASX: BLX)

The Beacon Lighting share price is up 3.5% to $3.13. Investors have been buying the retailer’s shares following the release of a first half trading update. Beacon Lighting revealed that it expects to report a result in line with the prior corresponding period’s sales of $151.3 million and net profit after tax of $22.2 million. It notes that the latter is significantly higher than analyst expectations.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up 11% to $9.74. This follows the release of the gold miner’s quarterly update but has been driven largely by a rise in the gold price. Traders were buying gold amid ongoing geopolitical risks and as an inflation hedge. Northern Star isn’t the only gold miner rising today. The S&P/ASX All Ordinaries Gold index is up over 7% today.

Virtus Health Ltd (ASX: VRT)

The Virtus Health share price is up 8% to $7.23 following the receipt of a takeover approach. The fertility treatment company has received a $7.60 cash per share non-binding offer from CapVest Partners. This improves on the $7.10 cash per share offer made by BGH. As a result, the Virtus health Board believes it is superior and has granted CapVest due diligence.

The post Why Allkem, Beacon Lighting, Northern Star, and Virtus Health shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Top broker tips Allkem (ASX:AKE) share price to shoot 20% higher
• Why the Northern Star (ASX:NST) share price is surging 7% today
• Why Allkem, Megaport, Redbubble, and Temple & Webster’s shares are falling
• Analysts name 3 hot ASX lithium shares to buy now
• Is the Allkem (ASX:AKE) share price going to keep charging higher?

Motley Fool contributor James Mickleboro owns Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Virtus Health Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Newcrest Mining Ltd (ASX: NCM) share price is glistening with a green complexion on Thursday.

At the time of writing, shares in Australia’s largest listed gold mining company are trading at $25.47, up 6.3%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 0.05% in afternoon trade.

What’s going on with the Newcrest share price today?

The Newcrest share price is having its best day since May 2020 when it gained 6.7%. However, the $19 billion gold-mining giant is moving without any new announcements out today.

If we step back and take a broader look at the gold sector, we see that Newcrest isn’t alone in its joyous performance. For reference, here’s how other gold miners are doing:

• Northern Star Resources Ltd (ASX: NST) up 11%
• Evolution Mining Ltd (ASX: EVN) up 8.5%
• Chalice Mining Ltd (ASX: CHN) up 6.1%

This information would suggest the reason behind Newcrest’s move is due to a sector-wide catalyst. It is likely the strengthening in the spot gold price overnight that is causing today’s momentum.

According to CNBC, gold rallied 1.7% to US$1,842.9 an ounce. The upward move places the precious metal at a 2-month high. In turn, the Newcrest share price is benefitting from it.

The reason behind gold prices making a move could be 2-fold.

Firstly, the most recent reports indicate the safe-haven asset has found renewed appeal amid geopolitical tensions between Russia and Ukraine. White House press secretary Jen Psaki has said Russia could instigate a conflict at any point — possibly between January and February.

At the same time, investors have been rotating into investments that are perceived as inflation hedges as rate hikes look more likely.

Bloomberg Economics has forecast the first rate increase in the US in March. Meanwhile, Westpac Banking Corp (ASX: WBC) expects the Reserve Bank to raise rates in August.

When are quarterly results coming?

The market’s attention is heightened around this time of the year. We are fast approaching earnings season and some companies are already posting their quarterly results.

Newcrest’s December quarterly results are slated for release on 28 January. There’s a good chance this event will have shareholders on the edge of their seats, hoping the Newcrest share price reacts positively to the update.

The post Newcrest (ASX:NCM) share price regains some shine as inflation worries mount appeared first on The Motley Fool Australia.

More reading

• Leading fund manager says these blue-chip ASX shares are buys right now
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• How does the Newcrest (ASX:NCM) dividend stack up against other ASX 200 miners like BHP?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Allkem has been upgraded to a buy rating by analysts at Morgans
• The broker sees 20% upside from current levels
• Allkem is the broker’s top pick in the sector

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The Allkem Ltd (ASX: AKE) share price is pushing higher again on Thursday.

In afternoon trade, the lithium miner’s shares are up 2% to $11.03.

This means the Allkem share price is now up 93% over the last 12 months.

Why is the Allkem share price pushing higher today?

The catalyst for the rise in the Allkem share price on Thursday has been a broker note out of Morgans this morning.

According to the note, the broker has upgraded the company’s shares to an add rating and lifted its price target on them to $13.25.

Based on the current Allkem share price, this implies potential upside of 20% over the next 12 months.

What did the broker say?

Morgans has been looking at the lithium sector and notes that spot lithium prices have hit new records and are putting pressure on contract prices.

Its preferred pick for lithium exposure is Allkem. This is due to its near term exposure sky high prices for the battery making ingredient and its long production growth runway.

The broker said: “Our preferred stock for lithium exposure, Allkem (AKE). AKE announced a 68% qoq increase in revenue at Olaroz and a 7% CY21 beat of production guidance at Mt Cattlin with large increases in realised prices at both projects. AKE expects USD20k/t for lithium carbonate sales in 2HFY22 at Olaroz. Production growth continues with Naraha commissioning, progress on Sal de Vida and FID expected on James Bay in 2QCY22. Construction is expected to commence the following quarter.”

All in all, this could make Allkem a lithium share to buy in 2022 according to the team at Morgans.

The post Top broker tips Allkem (ASX:AKE) share price to shoot 20% higher appeared first on The Motley Fool Australia.

More reading

• Why Allkem, Megaport, Redbubble, and Temple & Webster’s shares are falling
• Analysts name 3 hot ASX lithium shares to buy now
• Is the Allkem (ASX:AKE) share price going to keep charging higher?
• Why Allkem, BrainChip, Data#3, and JB Hi-Fi shares are charging higher
• Why ASX lithium shares could send heads spinning this earnings season

Motley Fool contributor James Mickleboro owns Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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APA Group (ASX: APA) is one of those fortunate ASX dividend shares that proved to be very good to investors over the past few years. That’s because this company was one of the few ASX blue-chip shares that weren’t forced to cut its payouts due to the impacts of the coronavirus pandemic. We saw blue-chip shares like Commonwealth Bank of Australia (ASX: CBA), Ramsay Health Care Limited (ASX: RHC), National Australia Bank Ltd. (ASX: NAB), Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) all slash their dividends between 2019 and 2021. But not the gas pipeline owner APA Group.

In fact, over 2020, APA managed to keep its dividend stream rising. It paid out a total of 45 cents per share in 2018 and 47 cents per share in 2019. But 2020 had investors receive 50 cents per share. And last year witnessed 51 cents per share hit investors’ pockets. So if you were living under a rock, funded only by APA’s dividends, you wouldn’t even know there had been a pandemic.

So with this venerable dividend record exposed, what might the future hold for APA and its dividends? Will 2022 see this ever-rising trend continue?

What kind of dividends will APA shares pay out in 2022?

Well, as it turns out, we do have some idea of what 2022 has in store for investors on the income front. Last month, the company announced that it is intending to pay a FY2022 interim distribution of 25 cents per share. This will be doled out on 17 March. As the company highlighted, that would represent a 4.2% increase on FY2021’s interim payment.

But wait, there’s more. APA also reaffirmed that it is intending to pay out a total of 53 cents per share for the 2022 financial year. That implies that, on top of this 25 cents per share interim dividend, APA will also pay a final dividend (presumably in September) of 28 cents per share. That would be a 3.7% rise from 2021’s final dividend.

If APA does indeed send this amount to investors this year, it would mean that the APA share price, at the current level of $9.88 (at the time of writing), offers a forward dividend yield of 5.36%. Food for thought.

The post What kinds of dividends will APA Group (ASX:APA) payout in 2022? appeared first on The Motley Fool Australia.

More reading

• What’s up with the APA Group (ASX:APA) share price today?
• These ASX dividend shares keep giving investors a payrise

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited and Ramsay Health Care Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended APA Group and Wesfarmers Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Treasury Wine’s Penfolds brand launched its second NFT this week
• BlockBar users can now purchase tokens representing bottles of an “ultra-rare” Penfolds wine
• Its follows the launch of an NFT representing a barrel of Penfolds wine in November

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Owners of Treasury Wine Estates Ltd (ASX: TWE) shares might be interested to learn of the company’s foray into non-fungible tokens (NFTs).

Indeed, one of the company’s crowning brands, Penfolds, has dipped its toes into the blockchain universe not once, but twice, launching its latest NFT earlier this week.

That’s right, the brand offers NFTs representing real bottles of rare wines as part of its partnership with luxury drinks-focused NFT marketplace, BlockBar. Let’s take a closer look at the seemingly unlikely offering.

At the time of writing, the Treasury Wine share price is $11.50.

Could this be the future of luxury liquor purchases?

Whether you’re an enthusiast of wine, NFTs, or shares, Treasury Wine has something for you.

The company’s Penfolds brand offers NFTs representing bottles of rare wines or, for true connoisseurs, an entire barrel of an exclusive vintage.

For those who might not be across NFTs, they are unique digital tokens representing ownership over something. Often, they represent ownership of a digital artwork or the like.

However, a Penfolds NFT represents a bottle of wine, stored by BlockBar and ready to be redeemed by its owner.

Penfolds’ latest token represents an “ultra-rare” bottle of Penfolds Magill Cellar 3 cabernet sauvignon shiraz from the 2018 vintage. Only 14 barrels of the wine were ever made and bottles aren’t available for retail purchase.

Those looking for a larger – or, perhaps, more interesting – liquor investment, might be interested in a barrel of Penfolds Magill Cellar 3 shiraz cabernet from the 2021 vintage.

The barrel was Penfolds’ first NFT. It launched in November, with one lucky buyer being randomly selected to buy the token for US$130,000.

Excitingly, the barrel NFT won’t be around for long. As of October, the real-world barrel will be bottled and the NFT replaced by 300 bottle NFTs.

Whoever is holding the barrel NFT at the time of bottling will receive a keepsake barrel head and several exclusive experiences.

Then, from October 2023, anyone who owns one of the 300 bottle NFTs can redeem their rare wine.

BlockBar allows the purchase of NFTs using Ethereum (CYRPTO: ETH) or a credit card.

Treasury Wine share price snapshot

Sadly, 2022 hasn’t been kind to the Treasury Wine share price so far.

Year to date, its shares’ value has fallen 8%. However, they’re still trading for 24% more than they were this time last year.

The post Fans of Treasury Wine (ASX:TWE) shares might be surprised to learn of its NFTs appeared first on The Motley Fool Australia.

More reading

• Will the Treasury Wine (ASX:TWE) share price get back to its pre-COVID levels?
• Here are Scott Phillips’ top 5 ASX shares for 2022. Is it time to buy?
• 5 things to watch on the ASX 200 on Monday
• What brokers are saying about the Treasury Wine (ASX:TWE) share price
• Analysts tip A2 Milk (ASX:A2M) and this share as buys

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Ethereum. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• ASX financials are doing slightly better than the benchmark index in 2022
• The Bank of Queensland share price is performing well against other banking majors
• Most brokers covering Bank of Queensland have it as a buy right now

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ASX financials are off to a shaky start in 2022 as the market undergoes another systematic correction from near all-time highs. Still, the financial sector is holding up slightly better than the ASX 200 benchmark.

While the S&P/ASX 200 index (ASX: XJO) is down 3.54% since January 1, the S&P/ASX 200 Financials index (ASX: XFJ) has slipped 3.22%.

The financials sector is faring better than other pockets of the market. For instance, the S&P/ASX 200 All Technology index (ASX: XTX) has plunged 11.5% in 2022. It is facing several systematic headwinds going forward.

Within the ASX financials group is the Bank of Queensland Limited (ASX: BOQ). Its share price has collapsed by 22% from its most recent high of $9.84 in October. At the time of writing, the Bank of Queensland share price is $8.03.

Central to the market’s troubles in the new year is the pressure of rising bond yields and the current level of inflation within the real economy. Both factors heavily influence interest rates, which tend to follow trends within the bond markets – particularly US Treasury bonds.

With this in mind, several leading brokers reckon that Bank of Queensland is poised to unlock shareholder value in 2022, and rate it as a buy.

Let’s take a look at what rising bond yields mean for the Bank of Queensland and see what the experts think.

What’s in store for the Bank of Queensland share price in 2022?

Yields on US Treasury bonds have been rising since December and are now at their highest levels since March 2021.

In response, investors are flocking to defensive asset classes like financials. They’re doing this in order to protect capital and ensure a rate of return that beats inflation.

Inflows into financial-themed ETFs have spiked this month, as investors fly to quality and look for pricing power in response to a shift in bond yields and, potentially, interest rates.

For instance, the iShares US Financials ETF (NYSEARCA: IYF) saw a 5% year on year gain in inflows in the last week of December.

The Financial Select Sector SPDR Fund (NYSEARCA: XLF) saw inflows of $2.34 billion in the first week of January – the highest of any ETF product.

Research from JP Morgan shows financial stocks had the highest correlation to changing bond yields over the past 5 years. This could bode well for the sector should bond yields continue rising, the broker says.

Not only that, but JP Morgan reckons the shift in bond yields will benefit Bank of Queensland‘s lending revenue. It sees $507 million in cash earnings for FY22 for the bank, in this regard.

Goldman Sachs notes that the Bank of Queensland’s deposit book is more rate-sensitive than the other banking majors. Strengths here are sure to offset any weakness in net interest margins, Goldman reckons.

Looking at broker sentiment for Australian banking majors, Bank of Queensland appears to have the most bullish weight behind it.

Both Goldman and JP Morgan rate it as a buy and value the bank at $9.67 and $9.80 respectively. The pair are joined by 9 other firms in a list of analysts provided by Bloomberg Intelligence. They set a consensus price target of $9.75.

Putting it all together, most brokers seem to think that the shift in bond yields will be a net positive for Bank of Queensland. Or at least, the bank can weather any storm created by this shift.

In the past 12 months, the Bank of Queensland share price has climbed by less than 1%. It is down by more than 3% in this past week of trading.

The post What do rising bond yields mean for the Bank of Queensland (ASX:BOQ) share price in 2022? appeared first on The Motley Fool Australia.

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• 40% drawdown: The Bank of Queensland (ASX:BOQ) share price is struggling. Is it a buy?
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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